January 21, 2009

Congratulations, Lets Get to Work

Welcome to Washington President Obama. Now we can start sending our e-mails to 1600 Pennsylvania Avenue when we want to Contact Obama. And today, we can raise our voice in unison on a specific economic issue: Obama's proposed tax cuts.

The Godless Liberal Homo blog lays out some rationals for sending this message to Team Obama:

Bush's tax cuts have been disastrous. The small checks for middle class and poor people did nothing to help our economy. They might have stimulated China's economy marginally, but China doesn't buy much anything from us.

Bush's enormous tax cuts for the rich have played a key role in our desperate economic situation. They contributed significantly to our government and foreign debt while doing nothing to create jobs here in the US. The wealthy used these unearned windfalls in an orgy of speculation, creating bubble after bubble (stocks, subprime mortgages, oil, gold, etc.) leading to crash after crash. Our treasury was looted to a huge extent to create money which mostly disappeared in 2008.

He's not alone. The January/February 2009 issue of Mother Jones Magazine also lays out the most "stimulating" actions that government can take to keep this recession from going further south.

You can read the Mother Jones article Stimulus is for Suckers for an explanation of the chart above. It's hard to see in the graph, but according to this analysis from Moody's Economy.com, an across-the-board tax cut only generates 3-cents of stimulus per dollar in cuts, whereas food stamps generates 73-cents per dollar of stimulus.

A bit wonkish I admit, but when Obama said in his inaugural speech that we need to be more responsible, this level of attention is part of what he was talking about.

Psssst... Do Something


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